How Do You Convert Roth To Traditional?
Converting a Roth Individual Retirement Account to a Traditional IRA is generally only done when an investor wants to reverse, or “recharacterize,” a conversion from a traditional to a Roth IRA. As the original conversion is taxable, sometimes an investor wants to change his strategy when he learns of his looming tax liability. As long as you act within a specified time range and follow Internal Revenue Service (IRS) regulations, it is possible to recharacterize a Roth IRA to a traditional IRA. Understand your tax situation. A traditional IRA is funded with pre-tax dollars, while a Roth IRA is an after-tax account. As a conversion to a Roth is a distribution from a traditional IRA, the entire amount of the account is taxable at the time of the conversion. If you can’t afford to pay the tax on this amount, or if it places you in too high of a tax bracket, or for other planning reasons, you may want to undo this conversion at tax time. Consult your tax adviser or thoroughly analyze your
